WASHINGTON -- Health care giant Johnson & Johnson lowered
Chief Executive William Weldon's total compensation by 9 per cent
in 2010, after two years of revenue declines and an unprecedented
string of recalls that have battered the reputation of medicines
like Tylenol and other household brands.

The New Brunswick, N.J.-based company awarded Weldon a package
worth $23.2 million -- including salary, bonus and other awards --
down from $25.6 million in the previous year. The company disclosed
the pay Wednesday in a Securities and Exchange Commission
filing.

The maker of Band-Aids, baby shampoo, contraceptives and
biologic drugs saw its revenue fall in both 2009 and 2010.
Previously the company had seen steady sales growth every year
since the Great Depression.

Much of the decline has been due to recalls involving millions
of bottles of over-the-counter medicines, including Children's
Tylenol, Benadryl and Motrin. Last week federal regulators signed a
legally binding agreement with the company to oversee control of
operations at three plants linked to the problems.

But J&J's board gave Weldon positive marks for the year
overall, saying he ``provided strong leadership during a very
demanding year.'' In commenting on the string of recalls -- 20
since September 2009 -- the board said ``Weldon's leadership and
engagement with employees, legislators, regulators, investors and
the news media enabled the company to deal with the issues.''

Some industry experts were taken aback by the review and pay
package granted to Weldon.

``Does paying a guy $23.2 million express any sense of concern
about what has happened at that company?'' remarked Erik Gordon, an
analyst and professor at University of Michigan's Ross School of
Business. ``The board has shown what they're willing to do:
nothing.'' Gordon, who has stated that Weldon should retire due to
the recent recalls, said the board should have cut the CEO's
compensation in half.

J&J's board appeared to tie most of the recall problems to
consumer products Chairwoman Colleen Goggins, who oversaw the
company's McNeil Consumer Healthcare unit before retiring earlier
this month. Her total compensation fell 12 per cent to $6.5 million
for the year. Still, the board did not level any direct criticism
at Goggins, instead praising her ``distinguished career with the
company.''

Weldon's salary grew 3 per cent for the year to $1.9 million.
His annual performance bonus fell $1.6 million, or 45 per cent, to
$1.9 million from $3.6 million last year. But when combined with
other components of his incentive package, his total non-equity
compensation totalled $12 million, down just 6 per cent from the
previous year.

Like most corporate executives, the bulk of Weldon's
compensation came in the form of stock options and awards, both of
which decreased. Stock options fell 10 per cent to $4.7 million
while awards fell 6 per cent to $12 million.

Weldon received various perks worth more than $254,000,
including use of company aircraft, cars and personal security.

In 2010, J&J's stock fell 4 per cent to $61.85, a steep
decline for a diversified company that sells everything from hip
replacements to contact lenses.

In its last quarter the company reported a 12 per cent drop in
profit, as sales were squeezed by a weak economy, pricing pressures
and recalls that have kept many popular nonprescription medicines
off store shelves. Sales of the company's over-the-counter
medicines fell more than 19 per cent for the full year.

Competitors Pfizer Inc. and Merck & Co. each named new CEOs
in recent months, generating speculation that J&J's board would
follow suit and replace Weldon. But analysts have pointed out that
many directors on the J&J board were nominated to their
positions by Weldon, who is also chairman.

Weldon, 62, joined J&J in 1971 and was named chairman and
CEO in 2002.

The Associated Press formula is designed to isolate the value
that the company's board placed on the executive's total
compensation package during the last fiscal year. It includes
salary, bonus, performance-related bonuses, perks, above-market
returns on deferred compensation and the estimated value of stock
options and awards granted during the year.

The calculations don't include changes in the present value of
pension benefits, and they sometimes differ from the totals
companies list in the summary compensation table of proxy
statements filed with the Securities and Exchange Commission, which
reflect the size of the accounting charge taken for the executive's
compensation in the previous fiscal year.